Mortgage rates, where they have been and where they are going
If you are shopping for a home loan, you know that watching the
rise and fall of mortgage rates can be a little nerve wracking.
One week they seem to be heading up, then next week they head
down. Should you lock in a rate now or wait and hope they might
fall further? Unfortunately there are no guarantees in the
mortgage rate game. All you can do is look at the current trends
and hope to make an informed decision.
First we must look at a little history. If you consider the big
picture of the last 25 years, things are looking good. The
highest average rate of 18.45% in 1981 was enough to make anyone
cringe. That was as high as most credit cards' interest rates!
In the more recent time span of 1992 to today, the average rate
for a 30-year fixed mortgage has stayed within the range of
9.25-5.25%. The lowest rates in recent history were in June of
2003. Since then, rates have followed a zigzag pattern up and
down, but generally are trending slightly upwards. But overall,
mortgage rates are still near their lowest in recent years.
This year, 30-year mortgage rates started out around 5.7%. After
dipping to the yearly low of around 5.2% they have rebounded to
the current level of 6%. The question is, will rates hold steady
in this range or is this only the start of a longer rise? That
is a topic on which whole volumes of books have been written. So
now we must make our best estimate based on the current data. If
you look at the current Federal Interest rate situation, new
housing sales, and resale-housing inventory, most signs point to
a rise in mortgage rates in the near term. How high, is
speculation for anyone, but a survey of "industry experts" show
that most expect to see mortgage rates at 6.75% sometime during
2006.